Hewlett Packard CEO invokes ‘fiduciary duty’, files lawsuit against Mike Lynch’s heirs

The CEO of Hewlett Packard Enterprises says his company has a “fiduciary duty” to pursue a civil judgment against a British billionaire tech tycoon who drowned last month along with his daughter and several business associates when his luxury yacht sank off the coast of Sicily.

Antonio Neri, whose company successfully sued Mike Lynch for fraud over the disastrous 2011 sale of his software company to HPE, told Bloomberg News on Wednesday: “We fundamentally believe that the events that took place were not in the best interests of shareholders, and we need to see this through to the end.”

HPE asked a British judge to award it $4 billion in damages after the Supreme Court ruled that Lynch and his former chief financial officer, Sushovan Hussain, manipulated accounts at now-defunct software company Autonomy Corporation before it was acquired by the U.S. tech giant for $11.7 billion in 2011.

HPE’s acquisition of Autonomy catapulted Lynch into the stratosphere of the UK’s wealthiest tycoons.

However, a year after the deal was struck, HPE announced an $8.8 billion write-down of Autonomy’s value, $5 billion of which was due to alleged accounting irregularities.

Lynch and Hussain have denied the allegations.

Hussain was eventually convicted of telecommunications fraud and securities fraud and sentenced to five years in a U.S. federal prison.

HPE brought legal action against Lynch, which was one of the most expensive and lengthy legal battles in British history.

In 2022, the Supreme Court ruled in favor of HPE.

The company had sought $4 billion in damages, but a judge said that sum may be too high.

A decision is expected to be made by the end of the year.

“HPE intends to pursue this proceeding to its conclusion,” the company said in a statement last week — just days after Lynch’s body was recovered from the seabed off the coast of Italy.

Earlier this year, Lynch, who the British press often called the “British Bill Gates,” was acquitted by a federal court in San Francisco of more than a dozen charges, including telecommunications fraud and conspiracy related to accusations that he tried to inflate Autonomy sales.

On August 19, Lynch, his 18-year-old daughter Hannah, and his wife were among 22 people aboard his superyacht, Bayesian, which sank just off the coast of the Sicilian town of Porticello, which was hit by a powerful tornado before dawn.

Lynch, his daughter and five others were killed. His wife, Angela Bacares, and 14 others — including a 1-year-old child — managed to escape the boat and make it to shore safely before the ship ran aground.

Last week, HPE told the UK’s Telegraph that it still intends to pursue compensation from Lynch’s heirs, despite widespread sentiment that the company, which has a market capitalisation of $33.43 billion, has shown little empathy towards the grieving family.

Lynch and his daughter were survived by Bacares’ wife and another daughter who was not on the ill-fated yacht.

“It was a sad situation,” Neri said of the tragic deaths, adding: “When the judge starts acting, we will pull ourselves together and see what happens next.”